Auto component makers’ revenue falls 3% in FY21
NEW DELHI: India’s auto component makers posted a 3% decline in cumulative revenue in FY21 to ₹3.4 lakh crore, showed data issued by the Automotive Component Manufacturers Association (Acma) on Tuesday, as production and sales fell sharply in the first half of the year due to strict lockdowns aimed at containing Covid-19.
The performance would have been worse but for a recovery in the second half of the year for both domestic and export markets. The auto component sector had recorded cumulative revenues of ₹3.49 lakh crore in FY20, a 11.7% decline from ₹3.95 lakh crore in FY19.
With economic activity gaining momentum after the first lockdown, passenger vehicle and two-wheeler makers saw robust demand with some companies expanding production to record levels.
Demand was mostly led by customer preference towards personal mobility to avoid Covid. In the third and fourth quarters, demand for commercial vehicles also started to recover gradually, albeit on a low base.
Component sales to original equipment manufacturers (OEMs) dropped 3% to ₹2.29 lakh crore in FY21. Exports fell 8% to ₹13.3 lakh crore. The turnover of the aftermarket segment fell to ₹64,524 crore in FY21 from ₹69,381 crore in FY20.
“With the economy progressively returning to normal and as vehicular demand picks up, we are cautiously optimistic about the performance of the industry for this year. The challenges on the front of availability of semiconductors, escalating prices, availability of raw materials, challenges on the front of logistics including nonavailability and high prices of containers, among others, continue to hinder a smooth recovery,” said Deepak Jain, president, Acma.
He said the nationwide lockdown put the supply chain in disarray and the industry took a significant time to stabilize operations after the gradual unlocking of the economy.
The auto industry came under pressure from the first week of April when Maharashtra began strict lockdown measures.
Delhi, Haryana, Karnataka, Tamil Nadu and others followed suit. Companies like Maruti Suzuki and Hyundai either stopped production or reduced output significantly.
Some like Bajaj Auto Ltd, however, continued to operate with limited capacity to meet export orders. With a steady drop in infections, especially in north and south India, most automakers have resumed operations from mid-May.
Automakers started to increase production and wholesales from June to meet demand for vehicles in the domestic and export markets.
After the gradual unlocking of the economy as Covid-19 cases fall, automakers have been increasing wholesales to increase dealer inventory, expecting pent-up demand in rural and urban markets.